We share the platforms across consumer, small business and real estate that allow for retail investors.

For online platforms there is considerable cost to be able to accept retail dollars. This is one of the reasons that Lending Club and Prosper were the only two platforms that allowed for retail investor participation for many years. Since many firms are just a few years old it’s much easier to target accredited individual and institutional investors due to the capital those investors have to deploy. However, there are now online lending platforms spanning almost every lending vertical that are open to retail investors. Below we share all of the opportunities retail investors should be aware of.

Lending Club – Consumer Lending

Lending Club allows retail investors access to consumer loans and has the most loan volume out of any other platform on this list. Investors can purchase fractions of loans starting at $25 and so can build a diversified portfolio with a relatively small investment. Borrowers are given loan grades from A-G and investors can decide which grades they would like to invest in. Lending Club advertises historical returns between 5%-7% with 99% of investors with over 100 loans achieving positive returns. In addition to the primary market, investors can buy and sell loans on Lending Club’s secondary market FOLIOfn which provides liquidity to investors.

Lending Club’s state and financial suitability conditions can be found on their website.

Prosper – Consumer Lending

Prosper’s platform is similar to Lending Club’s. Investors can purchase consumer loans ranging from grades AA-HR. One difference is that Prosper shut down their secondary market recently which means investors must hold notes to their maturity once purchased. Estimated returns vary from 3.83% to 13.04%

We hear from various sources on retail investor appetite for Lending Club loans.

A lot has been written recently about institutional investors interest in Lending Club loans following the Lending Club saga, but around 50% of funding comes from individual investors. This week there was a report from Morgan Stanley highlighting that retail investor confidence may be looking up. We also reached out to retail investor portals NSR Invest and LendingRobot to get their perspective regarding their paying clients.

The Morgan Stanley report consisted of a retail investor survey and while we can’t share the exact report we can talk in general about the results. Most investors were aware of the departure of Lending Club’s CEO Renaud Laplanche, but a majority of respondents were still positive about Lending Club with only a small percentage reporting they would stop investing. This is no surprise but it seems like the confidence of retail investors still remains strong given the results of the survey.

NSR Invest, a p2p investment advisor for financial advisors and individuals, noted material drops for two weeks following the Lending Club news. They also provided the following data points:

For the month of May new accounts and existing accounts both had net positive additions at NSR (3% growth in assets).

Over the last year more options have opened up for retail investors in P2P lending, but we may see more progress in 2016.

Over the last year there have been many developments for retail investors in p2p lending. This is a trend I expect to continue throughout 2016 as investors have more options to access marketplace lending and real estate crowdfunding. Most notable has been the maturing of the third party tools and new investment options in the form of Regulation A+ deals over the last year. In this post, we’ll review the state of the retail investor in p2p lending.

Lending Club and Prosper remain the only options for retail investors to invest in unsecured loans. Many investors prefer to use third party tools to direct their investments with these platforms. Some of these tools have stopped operations altogether while others have merged. We last reported on all of the third party tools in February of 2015. Here is a breakdown of the major news stories that feature the main tools still in operation for retail investors: [Read more…]

New Zealand's first P2P lending platform has a great first year in business achieving their goal of deploying their $100 million of committed lending capital.

You could fit the entire population of New Zealand (4.5 million people) in the New York City boroughs of Queens and Brooklyn. It is not a big country and certainly not where you would expect to find one of the emerging world leaders in marketplace lending. But Harmoney, celebrating their first year in business, is quickly becoming a force to be reckoned with.

I caught up with the Harmoney team this week to discuss their one-year anniversary and get an update on how they are doing. When I covered their launch 12 months ago I said they were the first platform I had ever seen launch with $100 million in lending capital before making a loan.

At that time they said they would deploy that entire $100 million in their first year. True, to their word, CEO Neil Roberts shared that they crossed that milestone two weeks ago. Here are some of the highlights from Harmoney’s first year in business:

$1 billion in loan inquiries

$100 million in approved loans

7,200 loans issued ($14K average size)

10,000 retail investors, 3,000 logging in several times a day

100,000 accounts created on their website

Harmoney was the first platform to be granted a P2P lending license by the New Zealand regulator, the Financial Markets Authority (FMA). The FMA has since granted two more licenses but Harmoney is the only company operating today. They have also recently been granted an Australian Credit License and will be launching operations there shortly.

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Lend Academy has been bringing you all the news and information about peer to peer lending since 2010. Founded by Peter Renton, Lend Academy not only has the most active news site, but also the largest online forum and the first and most popular podcast in the industry.

The Lend Academy team loves peer to peer lending and our staff have all invested their own personal money in one or more of the platforms. Lend Academy Media is part of Cardinal Rose Group which also owns LendIt, the leading industry conference, and has a majority interest in NSR Invest.